Posts in "Austrian Economics"

It's no secret that a great many YALers are big fans of the Austrian school of economics. And it's also no secret that Millennials are big fans of their smartphones. But until now, there was nothing bringing these two things together (shocking!). Well fear not, for Brian Balfour, Director of Policy at the Civitas Institute, has come to the rescue.

Balfour has created an app for iPhone and Android that explains the basics of Austrian economics -- right on your smartphone! From business cycle theory to common economic fallacies, this is a wonderful way to either review Austrian theory or start learning for the very first time!

The app uses dropdown menus to take you through the Austrian theory, from the basic assumptions of the theory to more complex concepts like public policy analysis and monetary policy.

So now when you're waiting for the metro or messing around on your phone before class, you don't have to just scroll through pictures of cats on Instagram -- you can learn Austrian economics! I deduce that many YALers will download this app due to their subjective preference for a future in which they have a better understanding of Austrian economic theory.

I found my way to the liberty movement through the writings of Ayn Rand. I therefore admit some bias when I say that the best way to get new people to explore the ideas of freedom, individual rights, and capitalism is to illustrate the points in a story.

Of course, it's not always possible to get people to read something as lengthy and complex as Atlas Shrugged.

It was with great pleasure that I stumbled across A. G. Fredericks on social media. His Twitter bio presents him as "#Libertarian, son of a US Marine, Fiscal Conservative Author of acclaimed Indie thriller #TheTroyStandard & #LibertyGulch."

I quickly procured a copy of his first book, The Troy Standard, and was very impressed. It is the story of a man who is courageous enough to point out the problems with status quo and he suffers dearly for his convictions. It is also an engaging discussion of Austrian economic policies.

In the words of Evey from V for Vendetta, “Artists use lies to tell the truth.” Encouraging friends or coworkers to read an engaging story is often much easier than handing them an economic treatise, or scholarly article. The Troy Standard is only 192 pages long and contains touching emotional drama, harrowing suspense, and action-packed thrills. In short, it is a perfect summer read.

Last month, the Global Intellectual Property Center (GIPC), in conjunction with the U.S. Chamber of Commerce, released a report evaluating intellectual property (IP) laws in eleven different countries. The report used five general categories—patent law, copyright law, trademark law, enforcement thereof, and participation in international treaties—as a basis for evaluation. The United States was ranked the highest of those studied, meaning its IP protection is the strongest in the world; worst among the eleven were Russia, Brazil, China, and India.

Brazil, Russia, China, and India have something else in common, however. Despite weak IP protection, these four countries have the fastest-growing emerging economies. In a February 2012 report by Price Waterhouse Coopers, these four countries—the “BRIC” nations—had average annual growth rates between five and nine percent in terms of GDP, up to three times the growth rate of the U.S.

Another recent report issued by the Republican Study Committee (RSC) indicates a shift in—or, at the very least, a questioning of—the general milieu surrounding IP protection. The paper, entitled “Three Myths about Copyright Law and Where to Start to Fix It” was authored by Derek S. Khanna, who was later removed from the RSC amidst intense backlash from the entertainment industry. Before being retracted, Khanna’s analysis concluded that overzealous copyright law was responsible for “retard[ing] the creation of a robust DJ/remix industry,…hampering scientific inquiry, [and] penalizing legitimate journalism and oversight.” He also offered different ideas for IP reforms, including limiting the length of time a work can remain under copyright.

Darth Plagueis was a dark lord of the Sith so powerful and so wise, he could… even keep the ones he cared about from dying… The dark side of the Force is a pathway to many abilities, some considered to be unnatural. He became so powerful, the only thing he was afraid of was losing his power.—Supreme Chancellor Palpatine, a.k.a. Darth Sidious

After much disappointment expressed by the public over the quality and substance of the Prequel Trilogy—grudgingly accepted by diehard fans—comes a novel to save the day and save the prequels, especially Episodes I and II. James Luceno’s Darth Plagueis excellently brings together the seemingly scattered events of the prequels to not only tie up loose ends, but also offers greater understanding of these films and a greater appreciation of the Star Wars storyline. Better yet, Darth Plagueis is a novel that could speak volumes on behalf of the Austrian School!

For those less-than-diehard Star Wars fans who insist that anything not in the six movies doesn’t count, they can witness this political-economic travesty of protectionism in Episode I: The Phantom Menace. Because of a dispute over the taxation of trade routes to other star systems, the Trade Federation launches a blockade of the planet Naboo. When the Jedi knights Qui-Gon Jinn and Obi-Wan Kenobi are sent to negotiate a settlement with the Trade Federation’s Viceroy, their diplomatic mission is simply to settle the issue but not to open the blockade, which, according to the Viceroy, is “perfectly legal.” The notable Austrian school economist Mark Thornton makes an excellent political-economic analysis of the Trade Federation’s aggression against the Naboo:

Lucas sends a clear message that the Federation agreement with the corrupt Republic is based on the model of British Imperialism by filling the movie with historical imagery. The Federation is British Imperialism in the form of the East India Company, which controlled and taxed the British possession of the Indian sub-continent. Of course, entrepreneurs complained and evaded British taxes and regulations, but the British Empire gave out monopoly rights to control India and other colonial trading rights in return for tax revenue.

For those knowledgeable nerds who are well-versed in Star Wars expanded universe history (such as your author), they would be familiar with the lore of the Great Hyperspace War. Originally appearing in the Tales of the Jedi comic book series and being mentioned throughout the Knights of the Old Republic game, this particular conflict is part of ancient Star Wars history, having been fought five thousand years before the time of Luke Skywalker.

This conflict began when some gold diggers waist-deep in debt decided to try their luck at finding new paths for hyperspace travel that could become lucrative trade routes and solve their financial woes. What originally happened was that, after dialing random coordinates and hoping to get lucky, the traveling pair of get-rich-quick schemers accidentally stumbled upon the Sith planet of Korriban and the entire Sith Empire, previously ignorant of the existence of the Galactic Republic and vice versa.

Star Wars is unquestionably a brilliant saga that touches the hearts of many through its incorporation of timeless literary archetypes and humanist themes. Adventure, love, loss, spirituality, good vs. evil, and the triumph of the human (and humanoid) spirit...

Yet there are other characteristics standing out that demand attention and respect, such as the saga’s inclusion of patterns of history (great wars and economic or political disasters) and of the interactions and exchanges of societies and individuals. One could practically point to passages from Mises’ Human Action or Theory and History while watching any given Star Wars episode!

Everyone knows the basic storyline that spans six episodes and numerous television and novel tie-ins. A once prosperous and peaceful republic decays over time from corruption and then war. Victory over secessionists in a great galactic war only serves to undermine the Republic’s ideals of liberty and hastens its demise and overt reorganization into the Galactic Empire. Following two decades of imperial rule and repression, a guerrilla army dedicated to reestablishing the Republic and maintaining its founding principles of liberty fights a lengthy campaign, pursuing only the help of willing parties, eventually destroying the Empire and restoring republican democracy to the galaxy.

"Air Force veteran Nellie Cooper thought she was following good advice when she refinanced her home's mortgage with an adjustable-rate loan," writes Gidget Fuentes of armytimes.com. Turns out this was not the case. Rather, following many years of illusionary expansion and soaring prices in the housing market, people like Cooper faced "financial ruin" when it all came crashing down. After an environment was created by the government in which anybody could buy a house -- whether they could afford it notwithstanding -- the situation quickly changed. The bubble burst and the price many individuals paid went beyond a dollar value.

Unfortunately, we are still stuck in this rut as the government has not decreased its active role in our lives and in the market. However, we can look back before the housing bubble popped and observe something very impressive: There were many people who actually saw it coming. Not surprisingly, they all have something in common: they're a part of the pro-liberty movement.

The Ludwig von Mises Institute's week-long Mises University program was amazing as always this year, with students representing about 32 US states and over 30 different countries. Lectures ranged from topics such as money and banking to the division of labor and praxeology. Meals were provided and everyone was able to discuss the fallacies of the state before heading to the bars to see Bob Murphy performing on stage.

Students were able to choose from concurrent lectures each day and ultimately chose whether or not to take a written and oral examination in front of a panel of judges. I think it is extremely exciting for the liberty movement that during this precipitous time in our history, multiple conferences like Mises U and events such as the YAL National Convention are now commonplace among options for students to involve themselves. This year's Mises University boasted the largest attendence on record, with many more applicants than could be accepted. There is no doubt now after having attended this program that the ideas of Mises, Rothbard, and the rest of the Austrian school are spreading all over the world. Many students will return home to their respective countries and localities to spread the message of economic liberty and its importance for societal progress.

To all who attended, it was great sharing the experience with you. To all who were not able, be looking for upcoming events regarding the Mises Institute. There might be a Mises Circle coming to your area!

Therefore nothing is more important today than to enlighten public opinion about the basic differences between genuine Liberalism, which advocates the free market economy, and the various interventionist parties which are advocating government interference. -- Mises, in Economic Freedom and Interventionism

Over at Zero Hedge, a phenomenal blog on all things financial, Tyler Durden, the site's anonymous owner and manager, sees some disturbing writing on the wall. Consumer credit is starting to increase again. With more and more money starting to change hands, prices are dangerously close to going through the roof:

He concludes, "If that is the case, we may be far closer to Bernanke losing control of the trillions in excess reserves (and a surge in "velocity" or however one calls this archaic construct) than we had expected previously."